You know excitement about a surge in mergers and acquisitions is growing when deal chatter spreads to the unloved banking sector. Unfortunately, one rumour—that Standard Chartered is a serious takeover target—looks like a dud. And that isn't just because chief executive Peter Sands has said as much.

It isn't surprising Standard Chartered is the subject of speculation. The UK bank's focus on emerging markets, initially seen as a strength after the global financial crisis, is currently its Achilles' heel, especially after a big write-down in its Korean business last year. Its management is in upheaval following the recent announcement financial chief Richard Meddings will leave. And it is still under the shadow of a $667 million fine levied in 2012 for breaching US sanctions against Iran.

But for believers in the long-term advantages of developing nations, Standard Chartered might look appealing. Its shares have dropped by over one-quarter since their peak last March. Its multiple of price to tangible book has fallen to 1.2 times from nearly 1.7 times in less than a year.

The problem is the other side of the equation—trying to identify a realistic buyer. Such a buyer would need deep pockets: Standard Chartered's market value is nearly $55 billion. The last time a cross-border deal of that size took place in banking was when Royal Bank of Scotland bought ABN Amro in 2007. That didn't end well.

Indeed, drastic changes in regulatory and political attitudes make banking megadeals practically unthinkable. The largest banks are now required to hold more capital. There is also great sensitivity to their outright size.

That alone could prove an insurmountable obstacle to any big bank with amorous intentions toward Standard Chartered, given it has assets of about $650 billion. Consider that before the crisis, JP Morgan Chase would have been seen as a potential suitor. Such a deal now would be implausible given the regulatory cloud over the bank, not to mention that it would swell JP Morgan's balance sheet to more than $3 trillion.

Midsize banks looking to grow would also face problems. Say Australia & New Zealand Banking Group —one of Standard Chartered's supposed suitors—were to do the deal. The combined bank would have a core Tier 1 capital ratio of around 9.5%, Sanford C. Bernstein estimates. Catapulted to megabank status, it could have to raise that to 11.5% to meet regulatory requirements. Some hefty cost or revenue synergies would be needed to make the deal economically viable.

That is before considering whether any national regulator would tolerate a bank under its purview adding a pile of emerging-market risk. China's regulator certainly seems to prefer its banks to expand abroad incrementally. European banks are still mostly in balance-sheet-repair mode, hardly the time for them to make big acquisitions.